In India, financial scams are widespread and have caused losses to the public exchequer in excess of INR 66,000 crores ( USD 1.6 trillion) over the last decade.
The term “scam” is generally used to describe a fraudulent or dishonest business deal or transaction; however, it can also be applied to other types of crimes such as corruption and fraudulently obtaining money or property from others by deception.
Since scams involve some form of deceit on the part of perpetrators and victims alike, it is important for people living in India to be aware about them so that they can avoid being victimized by such evil acts.
Harshad Mehta Stock Market Scam
The Harshad Mehta stock market scam was one of the biggest scams in the history of Indian stock markets. It involved a group of people including Harshad Mehta, Subrata Roy Sahara and Ashok Patel who were accused of manipulating the Bombay Stock Exchange (BSE) by using illegal means to make quick money out of it.
The scam was also known as Dalal Street Scam or Trimurty Scandal. The scam involved illegal means such as insider trading, market rigging and manipulation. It is said that the group made approximately Rs 5,000 crores out of this scam.
Ketan Parekh Stock Market Scam
In 1998, Ketan Parekh was arrested for his involvement in what is now known as the Ketan Parekh stock market scam. The scam involved a group of people including Harshad Mehta, Subrata Roy Sahara and Ashok Patel who were accused of manipulating the Bombay Stock Exchange (BSE) by using illegal means to make quick money out of it.
The scam involved a group of people including Harshad Mehta, Subrata Roy Sahara and Ashok Patel who were accused of manipulating the Bombay Stock Exchange (BSE) by using illegal means to make quick money out of it. The scam that came to light in the early 1990s is said to have cost investors more than Rs 1 lakh crore.
2G Spectrum Scam
The 2G spectrum scam is one of the most talked-about scams in India, thanks to its association with the former Prime Minister Dr Manmohan Singh and other politicians. The scam involved a group of people including A Raja who were accused of manipulating the allocation of licenses for 2G spectrum during 2007-08. The scam that came to light in 2013 cost investors more than Rs 1 lakh crore and caused a massive political crisis for the Congress party which was then ruling at the Centre.
The scam involved the allocation of second generation mobile phone licenses to telecommunication companies at throwaway prices. The licenses were allocated without any bidding process, which was against the norms. The government was also accused of making huge losses by not auctioning these licenses.
Satyam Scam was the biggest corporate scam in India. It involved the founder of Satyam Software, Shivram Raju and his family members who had siphoned off money from the company for their personal use. Satyam Scam has been referred to as one of the biggest frauds in India, with some estimates putting losses at nearly $1 billion (INR 8,000 crore).
The scam came to light when the founder of Satyam, B Ramalinga Raju, admitted that he had inflated profits of the company by Rs.8,000 crore (US$1 billion) over a period of several years. It was the biggest corporate scandal in India and its exposure caused losses worth billions of dollars for investors worldwide. The fraud began in early 2000s when Raju’s brother and others siphoned off money from the company for their personal use.
NSEL (National Spot Exchange Limited) scam
The NSEL scam was a multi-crore rupee ponzi scheme in which the investors were duped out of their money. It was launched by the National Spot Exchange Limited (NSEL) on 15 December 2010. The company promised to provide an exchange platform for commodities, but it did not deliver on its promises, resulting in collapse of all its operations on 9 February 2012 and leaving lakhs of people without any funds or property to claim from their respective banks.
The Reserve Bank of India (RBI) began an investigation into the scam and found that there were irregularities in the operations of NSEL. It was alleged that there were several financial irregularities and violations of norms by the company, which led to its collapse in 2012. The RBI also found that some banks had extended loans to NSEL against gold ornaments pledged by investors.
The scam was one of the biggest financial scams in India. The NSEL case was investigated by the Serious Fraud Investigation Office (SFIO). The SFIO is a government body that probes into frauds and irregularities in business operations. It was headed by Rakesh Asthana, who had earlier served as an Inspector General of Police (IGP) in Gujarat before being promoted to the post of Director General of Police
Bank of Rajasthan Scam
The Bank of Rajasthan (BoR) scam was a major scam in India during the 1990s. It involved the defalcation of Rs. 6 crore by employees of the Bank of Rajasthan in 1991, which was later laundered through bank accounts abroad.
The BoR Scam was an incident involving unauthorized withdrawals from BoR’s accounts and deposits into new accounts opened by its staff members at other banks across India with money being manually moved between them through multiple transfers to avoid detection by law enforcement agencies or other financial institutions like Reserve Bank Of India (RBI).
It was one of the earliest cases of bank fraud in India, and one that exposed how vulnerable Indian banks were to such fraudulent activities. The scam came into light when a senior manager at BoR’s branch in Jaipur noticed that about Rs 6 crore had been withdrawn from the bank without authorization. He reported this to the police, who arrested some staff members and recovered Rs 3 crore from them.
Saradha Chit Fund Scam
The Saradha chit fund scam was a major financial scam that took place in the state of West Bengal, India, and involved the collapse of a Ponzi scheme run by the Saradha Group. The company’s chairman Sudipta Sen was arrested on charges of criminal conspiracy to cheat investors out of their money.
The scam started with allegations that an employee working at one of its companies had embezzled funds from it while depositing them in other companies affiliated with him. This led to suspicion on other members within the group who were also accused of siphoning off funds from their own firms for their personal use or for financing another company owned by them.
As more people came forward claiming they had been defrauded by these companies, it became clear that there was something seriously wrong going on behind closed doors at this business empire which had been operating since 2001 under various names like “India Vision”, “Vision Group” etcetera
Read more about Saradha Chit Fund Scam here.
The IDBI scam was a money laundering scam involving the transfer of around Rs 5,600 crore from the Indian government’s Housing Finance Corporation (HFC), which is an agency under Department of Economic Affairs. This was exposed in 2015 and it involved two officials at IDBI Bank who were arrested by the Central Bureau of Investigation (CBI).
The Reserve Bank of India found out about this fraud after being alerted by its auditors about suspicious transactions being made at HFC bank accounts.
The CBI has arrested two IDBI Bank officials, Dinesh Kumar Garg and Hemant Bhurke for their involvement in the scam. The agency has also arrested three private individuals – Manoj Prasad, Anis Khan and T.S. Rajendran – for laundering money into the accounts of various shell companies that were set up by these officials.
Commonwealth Games 2010 Scam
The Commonwealth Games 2010 scam was a fraud that took place during the 2010 Delhi Commonwealth Games. It involved the manipulation of ticket sales to create an artificial increase in demand, which resulted in a significant financial loss for many people involved.
The scam’s mastermind is believed to be Manmohan Singh, who was accused of making nearly 6 crore rupees (about $1 million) off his involvement in it. Singh has denied any wrongdoing and claimed that he was unaware that there were any irregularities with respect to ticket sales until 2009 when he became aware of them after being directly contacted by authorities investigating this case
Singh has also claimed that he was aware that the ticket scam took place but did not participate in it. The people who were involved with this ticketing scam were arrested and charged with several crimes, including cheating and forgery.
Tatra Truck Deal Scam
The Tatra Truck Deal Scam is a massive fraud that was exposed in 1996. It involved the sale of trucks to the Indian Army at a price higher than what they were actually worth, causing an $200 million loss to the government.
The whistleblower who exposed this scam was a former employee at Tata Motors who reported what he saw to his superiors, who then reported it to government officials and eventually went public with his story.
The scam was exposed when the Indian Army received their first batch of trucks from Tata Motors. They found that the vehicles had a host of problems, including faulty engines and transmissions. When they tried to return the trucks to Tata Motors, they were told that they couldn’t because they had already been paid for in full.
The OROP scam was a fraud that took place in India in the year 1995. The scam involved the transfer of money from the Indian Army’s pension fund to private accounts. It was perpetrated by a group of people who had access to the pension fund and used it for their own gain.
The fraudsters were able to carry out this activity because they had access to information about how much money was being transferred each month through cheques, which could be deposited into bank accounts belonging to them or their friends or family members (known as nominees).
When the money was deposited into a nominee account, it would be withdrawn by the scammer as soon as possible to avoid detection. The fraudsters also created fake pension accounts in order to receive money from the fund. They did this by creating fake identity cards for themselves and their nominees and faking documents such as pre-retirement certificates.
The scam was detected in 1995 when the Indian Army’s pension fund noticed that money was being transferred out of its account. The head of the investigation team, M. B. Singh, concluded that a group of people had colluded with each other to perpetrate the fraud. He also found that some bank employees had helped them by withdrawing money from their accounts as soon as they received it via cheque deposits.
The Coalgate scam was a massive corruption scandal in India where the government was accused of illegally allocating coal fields to private companies. The scam involved the allocation of coal blocks to private companies between 2004 and 2009. It led to huge losses for taxpayers, who were defrauded out of money by corrupt politicians and bureaucrats during those years.
The Supreme Court ordered an investigation into this issue after allegations about irregularities in allocation of natural resources like iron ore, diamonds and coal were made public by news channels like NDTV 24×7 and Aaj Tak.
The investigations revealed that the scam was worth Rs. 10,000 crores ($1.6 billion), making it one of the biggest corruption scandals in India’s history. The Supreme Court cancelled all 204 coal block allocations after finding that they were made illegally by manipulating the system. It also ordered an investigation into Prime Minister Manmohan Singh, who had allegedly signed off on allocating these blocks to private companies without any auction or bidding process.
The Antrix-Devas Deal
The Antrix-Devas deal was signed in 2005, when then Indian Space Research Organisation (ISRO) chairman G Madhavan Nair and Devas Multimedia signed an agreement to lease S-band transponders on two satellites.
The deal involved leasing out two S band transponders which were to be launched by ISRO’s satellite PSLV C8/Polar Satellite Launch Vehicle (PSLV). However, it was later found that there were no such orbital slots available for these satellites and therefore the entire deal could not be executed.
The deal was also questioned by the then government and opposition, which raised questions about the legality of such a deal. Later, in 2011, a case was filed against ISRO and Devas by Antrix for violating provisions of the Indian Constitution and doing so without obtaining prior clearance from the Union Cabinet.
Telgi Scam (Stamp Paper Scam)
Telgi was a stamp paper scam kingpin who used to sell fake stamp papers. He used to print fake stamp papers, sell them at a lower price than the real ones, and then use them in his business.
He was arrested in December 2012 and sentenced to 10 years in prison. After his arrest, he said that he had made over Rs 400 crore from the scam.
In 2011, the Mumbai police busted a stamp paper scam and recovered Rs 8 crore from a house in Andheri. The police arrested three men—a lawyer, a businessman and an employee of the state government. They were accused of printing fake stamp papers worth Rs 6 lakh per sheet and selling them to various dealers in Mumbai’s suburbs.
The stamp paper scam was one of the biggest scams in Mumbai and it was estimated to be worth Rs 2,500 crore. It involved printing fake stamp papers that could be used as proof of payment for various services and goods. This scam had been going on for many years before it was busted by the police.
Scams are a common occurrence in the financial sector. They happen daily and are often reported on social media platforms like Facebook, Twitter and Instagram. The Treasury has issued many advisories about these scams but unfortunately, it is still difficult for the public to avoid falling prey to them or getting duped by con artists who want their money.